Commercial real estate foreclosures spiked last month. According to ATTOM data, the number of foreclosures rose 48% in September compared to the same month last year, with the largest increase in foreclosures occurring in California, where the annual increase was 238%.
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According to real estate data and analytics firm Atom, the number of commercial real estate foreclosures increased sharply in September both on a monthly basis and compared to the same month last year.
Commercial foreclosures increased 48% in September compared to the same month last year. According to the ATTOM report, there were 695 foreclosures nationwide. That’s slightly lower than when commercial foreclosures peaked earlier this year, but up 15% month-over-month, according to the report.
“Since June 2023, the number of foreclosures has increased rapidly, peaking at 752 in May 2024, but has stabilized at 695 in ATTOM’s latest data for September 2024. This recent spike “This suggests new financial stress and changes in commercial real estate trends.” The company said in a memo this week.
California saw the largest year-over-year increase in commercial foreclosures, with commercial building foreclosures jumping 238% from the same period last year. In New York state, the number of foreclosures increased by 48% compared to the previous year, and in Florida, the number of foreclosures increased by 49% compared to the previous year.
Commercial mortgage delinquency rates also rose slightly in the third quarter, with the percentage of loans that were 60 to 90 days late rising to 0.3% and the percentage of loans that were at least 90 days late rising to 2.7%, the company said. Mortgage Bankers Association. On the other hand, although the balance of loans with arrears of less than 30 days decreased slightly, it remained at a high level of 96.8%.
U.S. commercial real estate prices fell 9% from a year earlier in the first quarter, according to International Monetary Fund data.
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Real estate experts are warning of further hardship for commercial real estate, especially the office sector. Demand for two-story office buildings has declined since the pandemic, and some are predicting a wave of forced sales and defaults as debt continues to mature in the sector.
Some real estate experts speculate that the sale of unused office space could lead to a wave of conversion into apartments, solving problems for office owners and increasing supply in a constrained housing market. There is. But such an overhaul is difficult and expensive for homeowners.
Meanwhile, other more optimistic forecasts predict a recovery in the commercial real estate market. According to Moody’s analysis, trading in this sector has already bottomed out, with sales volumes increasing in September for the first time in two years.
